Ghanshyam Dass, J. - (1.) By means of this reference under Section 256(1) of the Income-tax Act, 1961, the following questions are being referred for the opinion of this court : "1. Whether, on the facts and circumstances of the case, the receipt of Rs. 30,000 being in the nature of prize for caption writing is taxable in the hands of the assessee or not ? 2. Whether, on the facts and circumstances of the case, the observation of the Tribunal that the same receipt is in the nature of income is correct or not ? 3. Whether, on the facts and circumstances of the case, the said receipt of Rs. 30,000 is covered by the definition under Section 2(24)(ix) of the Income-tax Act, 1961, or not and whether the same is taxable in the hands of the assessee or not ?"
(2.) The relevant facts in brief may be stated as follows : The assessee participated in the contest of Bombay Dyeing and Manufacturing Co. Ltd., Bombay, for caption writing by completing a sentence praising Bombay Dyeing fabrics in a few words and was adjudged for a prize and, accordingly, he got a prize of Rs. 30,000. The receipt of this amount was treated to be income by the Income-tax Officer and as such was included in the income of the assessee. The matter went up in appeal and the Appellate Assistant Commissioner held the receipt of Rs. 30,000 as income within the meaning of Section 2(24)(ix) of the Act and that the assessee was not entitled to the exemption under the Act. The assessee, then, preferred an appeal before the Tribunal against the judgment of the Appellate Assistant Commissioner of Income-tax. The Tribunal dismissed the appeal with the following observations : "A very wide meaning should be given to this expression (i.e., income) in order to include almost every kind of receipt or gain and also the notional incomes mentioned in Clause (24) of Section 2 of the Income-tax Act, 1961. Viewed in this context it is not under dispute that the assessee put in his skill exertion and effort for participating in the Bombay Dyeing contest and was awarded the prize of Rs. 30,000 for caption writing which was adjudged the best by the Bombay Dyeing authorities. This was, therefore, a receipt or gain arising from effort, skill and exertion by the assessee and was therefore of the nature of income."
(3.) The appellant then moved an application for reference of the matter to the High Court. In this way this reference came up for hearing before this court. We have heard Sri Vikram Gulati, learned counsel for the assessee, and standing counsel appearing for the Department.;